Tuesday, June 09, 2020

An end to extraction would be a good start.

"Cathay Pacific has said it will get a HK $39 bn ($5 bn) in state-backed bailout, as the airline struggles in the face of the coronavirus pandemic. Under the deal the Hong Kong government could take a 6% stake in Cathay and can have two observers on the board." "Airlines globally will lose over $84 billion during financial year 2020, the biggest in aviation history, due to the outspread of covid-19 and a muted travel appetite is expected to lead to at least $16 billion losses for airlines during financial year 2021, Alexander de Juniac, director general and chief executive of industry body International Air Transport Association (IATA) said on Tuesday." This is nearly one-fourth of the earlier estimate of $314 billion of losses by the IATA. Not just home governments. "Switzerland and Austria pledged to help Lufthansa with state-backed loans as the German airline pursues talks with Berlin over a $9 billion euro ($9.8 billion) rescue package." Singapore Airlines is to get a package worth S$19 billion ($13.27 billion) arranged by sovereign investment fund Temasek. So, what about India's national carrier Air India? The government tried to sell it in 2018 but did not receive a single bid for it. That was because the buyer was expected to take on debt of Rs 330 billion and the government intended to retain a 24% stake. This year the government has put 100% of the airline up for sale and reduced the debt load to Rs 232.86 billion. The lockdown due to the coronavirus grounded all flights, which are just beginning to take off again. Once the initial rush of people stuck away from home for two months abates, we will see how many are keen to put up with all the inconveniences of social distancing mandated by the minister. Since the sale is in abeyance for the time being the government is using Air India for mercy missions for Indians stuck abroad, which has been named Vande Bharat, meaning 'Hail to India'. Unfortunately, "Air India's special international service, which ferries Indians stranded abroad as well as flies some Indians to global destinations, is getting flak for what customers say exorbitant and arbitrary pricing and a poorly run website." "A Vande Bharat economy class ticket from Delhi to Houston starts at Rs 1.03 lakhs (Rs 103,000), twice of normal economy class fares." As far as our government is concerned, the quality of mercy is twice blest for it that takes and takes. While other governments are supporting their airlines our government has increased the price of jet fuel by 48%. "To rebuild the economy, we must focus on rebuilding social capital. To rebuild social capital, we need greater compassion across society," wrote Nitin Pai. Compassion is very far. We could do with an end to extraction. it's not 'Hail to India', it's 'Hail to the extractors'.     

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